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AMZN at 117.07
The chart of AMZN is setting up for a move higher. Earnings coming up in 2 weeks and this is a big risk. Size trade to assume full risk here.
I’m going with a 15pt wide call spread for about 1/3 of the width. IMplied POP 33%
Chart:
Risk Profile:
Order Ticket:
AMZN at 119.66
I’m going to make a slight adjustment to reduce risk in this trade.
I’m selling to close the long 115 call and I’m buying to open a call at 126 strike in the 26AUG expiry.
This makes it a 126/130 26AUG/19AUG Call Diagonal spread.
By collecting 5.15 credit I’m taking risk from $577 down to just $62 per spread.
Risk Profile:
Order Ticket:
AMZN at 118.23
I’m going to roll the short 130 call from 19AUG expiry to 26AUG expiry and down to 129 strike.
This roll produces a NET credit of about 0.65
By making this adjustment, we end up with a 3pt wide call debit spread with no risk.
Here’s the recap:
We picked up a call debit spread for 5.84
We rolled the long leg out and collected 5.20 – this left us with 0.64 of risk in the trade
By making today’s adjustment and collecting 0.65 – this will have removed all risk and leave us with max possible profit of 3.00 ahead of earnings (tomorrow AMC)
Risk Profile:
Order Ticket:
AMZN at 137.60
We have a 3pt call spread that has the max potential value of $300
This trade has 25 days until expiry. This means that to get to $300 we have to wait the next 25 days. We have an unrealized profit of close to $240
Do I want to wait the next 25 days to make the other $60?
It’s time to realize this profit and move on.
Risk Profile:
Order Ticket:
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